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BEFORE  THE 


Filed  with  the  Interstate 
Commerce  Commission, 
Washington,  D.  C. 
September  26,  1908 


Interstate  Commerce  Commission 


IN  THE  ) 

MATTER  OF  ALLOWANCES  > No.  1487. 
FOR  TRANSFER  OF  SUGAR.  1 


INFORMAL  ARGUMENT  ON  BEHALF  OF  INTERESTS 
DISCRIMINATED  AGAINST  THROUGH  THE  MANIP- 
ULATION OF  ALLOWANCES  FOR  ACCESSORIAL 
SERVICES,  SUCH  AS  LIGHTERAGE,  FLOATAGE  AND 
CARTAGE  ON  SUGAR  IN  NEW  YORK  CITY. 


WARD  W.  PIERSON, 

Counsel, 


FRANK  L.  NKALIy. 


PhiIvAdklphia,  September  19,  1908: 


New  York  Trunk  Line 
Railroads  Represented ; 


"New  York  Central  and  Hudson  River  R.  R.  Co 
West  Shore  Railroad  Co. 

K Lehigh  Valley  Railroad  Co. 

Erie  Railroad  Co. 

. Delaware,  Lackawanna  & Western  R.  R.  Co. 


EXTRACT  FROM  BRIEF  OF  COUNSEL  OF  NEW  YORK  TRUNK  LINES  (page  9) 

“ The  result  is  that  the  carriers  at  New  York,  in  order  to  compete  with 
the  carriers  at  Philadelphia  in  so  competitive  a traffic  as  sugar,  must 
bear  the  expense  of  the  delivery  of  such  traffic  to  their  terminals. 

With  reference  to  most  commodities,  we  have  found  that  if  we  bear 
the  lighterage  expense,  we  have  reasonably  equalized  the  manufact- 
urers of  the  two  places.  It  has  been  found,  however,  that  with  respect 
to  sugar  such  concession  would  be  insufficient  to  protect  the  New 
York  sugar  Interests  in  competition  with  the  Philadelphia  refineries.” 


THE  BRIEF  CONTINUES  (page  31): 

The  Commission  has  repeatedly  ruled 

that  it  will  not  by  an  adjustment  of  rates  or 
facilities  offered  by  a carrier  undertake  to  equal- 
ize the  natural  advantages  of  location.” 

Lighterage  allowance  on  sugar  (sworn  testimony) 4 1/5C.  per  100  lbs. 

.Drayage  or  Cartage  allowance  on  sugar  (sworn  testimony)  . . 2c.  “ “ “ 

Aggregating 6 1/5C.  per  100  lbs. 

o*’  |i-39  per  ton  of  2240  lbs. 


Differential  INomfnally  allowed  Philadelphia 2c.  per  100  lbs. 

Differential  Actually  allowed  New  York 6 1/5C.  per  100  lbs. 

(under  name  of  accessorials) 


• • • 


1 

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PAGE 


Caption 1 

Preliminary  Statement 1 

(Fandamental  principle  involved.  Not  merely  a local  question.) 

Reasons  for  Intervention 2 


(Invitation  extended  by  Counsel  of  New  York  Trunk  Line  Railroads.) 

Three  General  Propositions  Involved.  (Discrimination.— Economic  Waste 
versus  Legitimate  Railroad  Profits. — Necessity  for  immediate  intervention 
of  Interstate  Commerce  Commission.) 


Scope  of  Argnment.  .. 3 

Point  I.  Accessorial  charges,  a subterfuge  whereby  rebating  is  accomplished.  4 

Point  II.  Accessorial  charges  produce  discrimination 8 

Point  III.  Accessorial  charges  deprive  Railroads  of  revenue 12 

Point  IV.  Railroads  cannot  on  their  own  initiative  accomplish  radical- 

changes 14 

Point  V.  Accessorial  requirements  are  so  varied  that  Commission  will 

soon  be  overwhelmed  by  vast  number  of  complaints 15 

Point  VI-  Impossible  to  decide  justly  between  conflicting  interests 16 

Point  VII.  Necessary  for  Interstate  Commerce  Commission  to  lay  down 

general  principle 17 

Point  VIII.  Only  principle  which  will  apply  generally  is  complete  separation 

of  rate,  for  rail  transportation,  from  rates  for  accessorials.  17 

Exhibit  “A.”  Series  of  blueprints.  (Index) 21 

Exhibit  “B.”  Comparison  of  accessorial  allowances  on  sugar  in  New  York 

with  various  freight  rates 23 

Exhibit  “ C.”  Transportation  of  Java  Sugar,  from  producer  to  consumer 30 

Exhibit  “D.”  List  of  Sugar  Refineries 31 

Exhibit  “E.”  Port  Differentials. — Differential  inland  freight  rates 32 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 

University  of  Illinois  Urbana-Champaign  Alternates 


https://archive.org/details/inmatterofallowaOOunit 


BEFOKE  THE 


Interstate  Commerce  Commission 


IN  THE  MATTER  OF  j 

ALLOWANCES  FOR  TRANSFER  - 
OF  SUGAR. 


No.  1487. 


INFORMAL  ARaUMENT  ON  BEHALF  OF  INTER- 
ESTS DISCRIMINATED  AGAINST  THROUGH 
THE  MANIPULATION  OF  ALLOWANCES  FOR 
ACCESSORIAL  SERVICES,  SUCH  AS  LIGHT- 
ERAGE, FLOATAGE  AND  CARTAGE  ON 
SUGAR  IN  NEW  YORK  CITY. 

Important  as  this  case  is  to  the  parties  and  to  the  localities 
directly  concerned,  its  vital  importance  lies  in  the  fact  that 
it  tends  to  illustrate  in  a startling  manner  what  is  believed  to 
be  A FUNDAMENTAL  PRINCIPLE:  That  accessorials, 
viz.,  charges  for  outside  operations  or  services  rendered  by  a Rail- 
road, such  as  lighterage,  floatage  or  cartage,  or  any  expense  or 
allowance  other  than  those  incident  to  strictly  rail  transportation, 
should  never  be  an  integral  part  of  a freight  rate.  On  the  con- 
trary, every  freight  rate  should  be  so  divided  as  to  differentiate 
the  charge  for  strictly  rail  transportation  from  any  other  charge, 
such  as  for  prior  or  subsequent  accessorials.  This  would  allow 
one  or  all  of  the  services  to  be  availed  of  by  each  individual 
shipper  or  consignee  according  to  his  special  requirements.  It 
would  prevent  the  shipper  or  consignee  from  being  charged  a pro 
rata  share  for  cost  of  services  not  desired,  required,  or  availed  of. 
It  would  terminate  a favorite  form  of  rebating  still  in  constant 
use  known  as  an  allowance. 


2 


REASONS  FOR  INTERVENTION 

In  the  Brief  of  Counsel  for  the  New  York  Central  & Hud- 
son River  Railroad  Co.,  the  West  Shore  Railroad  Co.,  the  Lehigh 
Valley  Railroad  Co.,  the  Erie  Railroad  Co.,  and  the  Delaware, 
Lackawanna  & Western  Railroad  Co.,  “In  the  matter  of  Allow- 
ances for  Transfer  of  Sugar,”  the  following  appears,  on  page  48  : 

“We  invite  any  proceedings  by  a Philadelphia  shipper, 
“ alleging  that  payment  of  this  allowance  discriminates 
“ against  him  in  view  of  his  lesser  rate.” 

One  of  the  undersigned  is  a member  of  a firm  that,  acting  as 
agents  of  owners  of  vessels  delivering  cargoes  of  sugar  at  Phila- 
delphia, New  York,  and  Boston,  has  handled  hundreds  of  thou- 
sands of  tons  of  sugar  within  recent  years.  For  a period  of 
twenty  years  he  has  had  direct  charge  of  compiling  current 
statistics  of  sugar  imports  and  receipts  at  the  respective  United 
States  Ports,  and  in  consequence  is  in  close  touch  with  the  Sugar 
situation,  and  cognizant  of  facts  which  afi*ect  the  transportation 
of  sugar.  Therefore  we  accept  the  invitation,  and,  with  the  permis- 
sion of  the  Commission,  make  it  our  excuse  for  intervening  in  this 
case. 


THREE  GENERAL  PROPOSITIONS  ARE 
INVOLVED. 

First.  The  testimony  now  in  the  hands  of  the  Commis- 
sion in  this  case  and  in  the  Federal  Sugar  Refining  Co.  case 
(No.  1082),  demonstrates  that  the  manipulation  of  accessorial 
charges  and  allowances  in  New  York  City  and  the  payment 
thereof  by  railroads  to  specially  favored  interests,  does  dis- 
criminate against  Philadelphia  in  the  matter  of  freight  rates. 

The  discrimination  produced  between  one  shipper  and 
another,  between  one  class  of  traffic  and  another,  between  one 
locality  and  another,  and  between  one  carrier  and  another,  by 
the  manipulation  of  accessorials,  is  notorious.  Not  only  does  the 
manipulation  of  accessorial  charges  in  New  York  City  result  in 
discrimination,  but  also  it  is  a sinister  device  by  means  of  which 
the  demand  for  rebates  is  satisfied,  and  Interstate  Commerce 
Laws  are  subverted. 


3 


Second.  While  we  expect  to  show,  with  very  little  effort, 
that  there  is'^gross  discrimination  against  Philadelphia,  the  facts 
brought  out  at  the  hearings  in  the  above  mentioned  cases  involve 
a much  broader  problem  than  a mere  local  question  between  the 
neighboring  cities  of  Philadelphia  and  New  York.  The  develop- 
ment of  this  broader  situation  unquestionably  involves  the  entire 
problem  of  terminal  services  and  accessorials,  and  their  relation 
to  freight  rates. 

In  order  to  secure  inordinate  profits  through  the  appropria- 
tion of  accessorials,  certain  interests  have  compelled  railroads  to 
aid  them  to  divert  a large  traffic  from  the  most  direct,  natural,  and 
least  expensive  route,  thus  entailing  tremendous  economic  waste. 
Once  the  railroads  are  freed  from  demands  for  accessorial 
allowances,  the  economic  waste  which  inevitably  flows  from  the 
artificial  conditions  now  maintained  can  be  readily  converted  into 
legitimate  railroad  profits,  and  the  alleged  necessity  for  advance  in 
freight  rates  will  to  that  extent  be  obviated. 

Third.  Unless  The  Interstate  Commerce  Commission  wisely, 
firmly  and  promptly  intervenes,  and  requires  the  separation  of  the 
rate  for  strictly  rail  transportation  from  the  rate  or  rates  for  prior  or 
subsequent  services,  it  will,  ere  long,  be  involved  in  complications 
and  conflicting  decisions  from  which  there  will  be  no  escape.  Its 
conclusions  will  frequently  be  inequitable,  through  no  intentional 
bias  or  prejudice,  but  through  inability  to  ascertain  all  the  facts 
in  a multitude  of  cases,  or  to  grasp  and  analyze  confusing  details 
that  may  be  purposely  interjected  into  a given  situation  by 
interested  parties. 

SCOPE  OF  ARGUMENT. 

We  expect  to  show: 

Point  One. — That  accessorial  charges,  or  expenses,  or 
allowances,  included  as  an  integral  part  of  a rate  of  freight, 
readily  become  a subterfuge  whereby  the  payment  of  a rebate 
is  accomplished. 

Point  Two, — That  accessorial  charges,  or  expenses,  or 
allowances,  included  as  an  integral  part  of  a rate  of  freight, 
necessarily  produce  discrimination. 


4 


Point  Three. — That  accessorials  included  as  an  integral 
part  of  a rate  of  freight,  deprive  the  Railroad  Company  of  revenue 
properly  belonging  to  it. 

Point  Four. — That  the  long  continued  practice  of  paying 
accessorial  expenses  out  of  the  freight  rate,  the  interest  of 
powerful  patrons  profiting  thereby,  and  the  pressure  of  competi- 
tion, make  it  impossible  for  the  Railroad  Companies,  on  their  own 
initiative,  to  accomplish  any  radical  changes. 

Point  Five. — That  as  the  accessorial  requirements  of  ship- 
pers or  consignees  vary  in  almost  every  individual  case,  questions 
growing  out  of  conditions  similar  in  principle  to  those  now  before 
The  Commission  will  be  multiplied  to  such  an  extent  that  The 
Commission  will  soon  be  overwhelmed  by  a vast  number  of 
complaints. 

Point  Six. — That  it  will  be  found  impossible  to  decide 
equitably  between  conflicting  interests  in  a multitude  of  sub- 
stantially analogous  cases. 

Point  Seven, — That  the  only  course  open  to  The  Inter- 
state Commerce  Commission  is  to  lay  down  an  equitable  principle 
applicable  in  general  to  all  cases  which  may  arise. 

Point  Eight. — That  the  only  principle  which  will  apply 
generally  to  all  cases  is  a complete  separation  of  the  rate  for 
rail  transportation  from  the  rates  for  accessorials. 


POINT  ONE. 

ACCESSORIAL  CHARGES  OR  EXPENSES  OR 
ALLOWANCES  INCLUDED  AS  AN  INTEGRAL 
PART  OF  A RATE  OF  FREIGHT,  READILY 
BECOME  A SUBTERFUGE  WHEREBY  THE 
PA  YMENT  OF  A RE  BA  TE  IS  A CCOMPLISHED. 

In  the  brief  of  New  York  Trunk  Line  Railroad  Companies, 
in  the  case  referred  to  in  the  caption  of  this  brief,  it  is  explicitly 
stated  by  the  learned  counsel  (page  9)  that  with  reference  to  most 
‘‘  commodities,  we  [meaning  New  York  Trunk  Line  Railroads] 
“ have  found  that  if  we  bear  the  lighterage  expense  we  have 


5 


‘^reasonably  equalized  the  manufacturers  of  the  two  places 
“[meaning  Philadelphia  and  New  York].  It  has  been  found, 
“ however,  that  with  respect  to  sugar,  such  concession  would  be 
“insufficient  to  protect  the  New  York  sugar  interests  in  competi- 
“tion  with  the  Philadelphia  refineries.” 

This  is  a voluntary  statement  that  the  accessorials  are  used 
by  New  York  Trunk  Line  Railroads  intentionally  and  deliberately 
to  deprive  the  manufacturers  of  Philadelphia  of  the  natural 
advantages  of  their  location.  Perhaps  inadvertently,  perhaps 
intentionally,  at  page  31  of  the  same  brief,  the  same  Trunk  Line 
counsel  state  that  “ The  Interstate  Commerce  Commission  has 
“repeatedly  ruled  that  it  will  not,  by  an  adjustment  of  rates  or 
“ facilities  offered  by  a carrier,  undertake  to  equalize  the  natural 
“ advantages  of  location.”  The  inference  is  plain.  We  offer  no 
comment. 

These  statements,  however,  lead  us  to  make  two  queries. 
First:  How  is  the  system  operated  whereby  Trunk  Line  Rail- 
roads are  able  to  overcome  the  natural  advantages  and  facilities 
of  Philadelphia?  Second:  Why  have  Trunk  Line  Railroads 
felt  constrained  to  create  and  maintain  unnatural  conditions 
in  New  York  City  so  as  to  overcome  the  naturally  advan- 
tageous commercial  position  of  Philadelphia?  We  need  not  go 
far  to  find  a complete  answer  to  both  queries.  We  need  only  to 
search  out  the  underlying  purpose  and  observe  the  practice  of 
certain  Trunk  Line  Railroads  in  the  payment  of  accessorial 
charges  to  New  York  refiners  of  sugar.  These  accessorial  charges 
are  for  alleged  services  prior  to  the  time  when  actual  rail  trans- 
portation begins.  They  are  euphemistically  styled  allowances. 
Their  proper  name  is  rebates. 

Raw  sugar  direct  from  Java,  Hawaii  and  Cuba  is  received 
and  refined  in  New  York  and  in  Brooklyn.  The  refined  product 
ready  for  consumption  is  carted  from  the  refinery  to  the  water’s 
edge ; thence  it  is  lightered  or  floated  across  the  harbor  to  the 
Jersey  City,  Hoboken  and  Weehawken  Terminals  of  Trunk  Line 
Railroads.  The  distances  consignments  of  sugar  are  carted  by 
the  refineries,  and  for  which  they  are  paid  by  the  railroads 
accepting  the  consignments,  vary  from  no  distance  whatsoever  in 
a majority  of  cases,  to,  say,  three-fourths  of  a mile.  For  this 
service  the  refining  companies  receive  from  the  Railroads  2c.  per 
100  pounds. 


6 


As  a business  proposition,  we  submit  that  there  is  only 
one  sugar  refinery  in  New  York,  viz.,  the  Havemeyer  & Elder 
Refinery,  Brooklyn  (American  Sugar  Refining  Co.),  that  is 
without  direct  rail  connection.  The  claim  that  the  refinery  of 
the  Arbuckle  Brothers  is  without  rail  connection  cannot  be 
allowed,  since  the  tracks  of  the  Jay  Street  Terminal  run  along- 
side their  buildings,  and  the  Jay  Street  Terminal  is  owned  by  the 
same  parties  who  own  the  refinery.  (See  Exhibit  A.) 

Wherever  no  cartage  service  is  performed  a free  gift  of  2c. 
per  100  pounds  shipped  is  accorded  the  sugar  refining  company. 
In  no  case  is  the  service  actually  rendered  commensurate  with  the 
charge  forced  upon  the  railroads  for  its  performance.  This,  then, 
is  the  first  step  in  a series  of  disguised  rebates,  for  to  whatever 
extent  the  service  and  the  charge  are  not  commensurate,  to  that 
extent  is  a rebate  paid.  While  it  is  too  patent  to  require  assertion, 
we  deem  it  worth  while  to  add,  that,  where  a charge  is  fixed  and 
paid  and  no  service  performed,  or  where  a charge  high  or  low  is 
fixed  and  paid  and  an  unnecessary  service  performed,  that  in  such 
instances  there  is  a useless  burden  placed  upon  transportation, 
and  an  inexcusable  economic  waste. 

At  the  water’s  edge  the  sugar  is  loaded  into  cars,  into 
lighters,  or  into  car  floats,  and  transported  from  New  York  or  from 
Brooklyn,  across  the  harbor  to  Trunk  Line  Railroad  Terminals — 
a distance  of  say  flve  miles.  For  this  service  the  railroad  allows 
(out  of  the  freight  rate)  4|-c.  per  100  pounds  on  all  sugar  destined 
to  points  West  of  the  western  termini  of  Trunk  Lines,  i.  e.,  Buffalo, 
Erie,  Pittsburg,  Wheeling,  etc.,  and  3c.  per  100  pounds  on  all  sugar 
destined  to  points  East  of  those  termini.  That  is  to  say,  before 
New  York  Trunk  Line  railroads  ever  turn  a wheel  they  make  an 
allowance  out  of  the  freight  rate  of  2c.  for  cartage  and  4-|^c.  for 
lighterage,  in  all  6^c.  per  100  pounds,  to  bring  a certain  com- 
modity to  them  in  order  that  they  may  carry  it.  That  such  a 
condition  is  economically  unwarrantable  is  obvious.  The  real 
vice,  however,  becomes  apparent  when  we  learn,  that  not  only  do 
the  refining  companies  receive  the  allowance  for  cartage  already 
pointed  out,  but  the  transfer  and  terminal  companies  which  per- 
form the  lighterage  service  for  the  greater  part  of  the  output  of 
the  refineries  are  owned  or  controlled  by  the  refiners  themselves, 
though  incorporated  under  other  names.  Therefore  the  net  rate 
of  freight  to  the  refiner  is  the  difference  between  the  published 


7 


rate  and  the  allowance.  If  by  any  chance  the  refiner  should 
make  a profit  out  of  the  service  performed  for  the  stated  allow- 
ance, to  that  extent  a rebate  is  enjoyed.  As  a matter  of  fact,  the 
sum  of  6|-c.  per  100  pounds  paid  by  Trunk  Line  Railroad 
Companies  to  the  Sugar  Refining  Companies,  or  their  offspring 
the  Terminal  Companies,  covers  not  only  the  actual  cost  of  cart- 
age, and  lighterage,  or  floatage,  but  it  includes  a sufficient  sum 
additional  to  guarantee  a fabulous  profit. 

The  following  comparative  statement,  exhibiting  allowances 
actually  made  by  New  York  Trunk  Line  Railroads  for  cartage  or 
transfer,  and  lighterage,  or  floatage  of  sugar  between  the  refineries 
and  the  railroad  terminals,  and  a liberal  detailed  estimate  of 
actual  costs  of  performing  the  respective  services,  shows  a profit 
of  approximately  200  per  cent,  now  accruing  to  the  sugar  refiners 
for  transporting  their  own  merchandise  to  the  railaoad  terminals. 

(See  Exhibits  B,  C.) 

PROPOSITION : — Car  floats  containing 
10  or  more  cars  each.  Each  car  con- 
taining at  least  50,000  pounds,  gross 
weight,  of  sugar.  Movement,  Brooklyn 
Eastern  District  Terminals,  or  Jay  Street 
Terminals  to  Jersey  City,  Hoboken,  Wee- 
hawken  or  60th  Street. 

Allowances  under  present  conditions — 

10  cars  of  sugar  (500,000  pounds  gross 
weight)  @ 2c.  for  cartage  -f  4^c.  light- 
erage, per  100  pounds  $310.00 

(Note. — These  are  the  rates  of  allowances 
made  by  Trunk  Line  Kailroads  to  New  York 
Refineries  on  sugar  destined  to  or  beyond  West- 
ern Termini.) 

Estimated  actual  disbursements  or  costs  in 
above  connection,  for  cartage,  transfer, 
or  manipulation  of  sugar  from  refineries 
to  aboard  cars  at  B.  E.  D.  T.,  J.  S.  T. 
etc.  500,000  pounds  @ Ic.  per  100 
pounds  $50.00 


8 


Shifting  and  handling  cars  from  floats 
through  ferry  bridges  to  terminal  tracks 
and  vice  versa,  $1.50  per  car $15.00 

(Note. — In  many  instances  cars  are  loaded 
without  removing  from  floats.  In  such  cases  no 
shifting  expense  is  incurred.) 

Floating  cars — Jersey  City  to  B.  E.  D.  T. 
and  J.  S.  T.  light  and  returning  loaded 
cars  from  B.  E.  D.  T.  and  J.  S.  T.,  to 
Jersey  City,  $4.50  per  car  for  round 
service  45.00  $110.00 

Leaving  net  $200.00 

(Say  upon  500,000  pounds  sugar,  4c.  per  100  pounds  profit.) 

The  New  York  sugar  refiners  are  allowed  6^g.  per  100 
pounds  out  of  the  published  rate  of  freight  for  transferring  their 
product  to  the  Railroad  Terminals.  Four  cents  of  this  is  profit. 
This  4 cents  profit  operates  not  only  as  a rebate,  but  as  a dis- 
criminating rebate.  It  is  not  called  a rebate.  It  is  called  an 
allowance.  But,  regardless  of  the  particular  expression,  the 
concession  clearly  effects  a reduction  of  6^c.  per  100  pounds  from 
the  published  rate  of  freight.  In  this  situation  lies  the  greatest 
vice  of  giving  terminal  allowances. 


POINT  TWO. 

ACCESSOEIAL  CHARGES  OR  EXPENSES  OR 
ALLO  WANCES  INOL  UDEB  AS  AN  INTEGRAL 
PART  OF  A RATE  OF  FREIGHT  NECESS AR- 
IL Y PR  OB  UCE  DISCRIMINA  TION 

Accessorial  allowances  not  only  permit,  but  actually  induce 
discrimination.  No  better  illustration  can  be  offered  than  the 
discrimination  now  being  suffered  by  independent  sugar  refiners. 
(See  testimony.  Federal  Sugar  Refining  Co.,  case  No.  1082.) 

We  believe  the  following  statements  to  be  self  evident: 

If  the  published  rate  of  freight  on  one  commodity  contains 
accessorial  allowances  not  granted  to  another  commodity,  there 
is  discrimination  between  different  commodities. 


9 


If  the  published  rate  of  freight  on  one  commodity  contains 
allowances  which  make  the  net  rate  too  low,  and  carriers  are 
obliged  to  recoup  themselves  by  increasing  rates  of  freight  on 
other  commodities,  there  is  discrimination  between  different  classes 
of  traffic. 

If  the  published  rate  of  freight  contains  an  allowance,  say 
for  lighterage,  and  the  man  who  loads  his  freight  directly  into 
cars  has  to  pay  the  same  rate  as  one  whose  merchandise  is 
lightered,  there  is  discrimination  between  shippers. 

If  the  published  rate  of  freight  contains  an  allowance,  say 
for  cartage,  and  the  shipper  who  loads  his  freight  directly  into 
cars  receives  the  same  allowance  as  the  one  who  actually  furnishes 
cartage,  there  is  discrimination  between  sliip'pers^  and  further,  it 
is  unlawful  to  make  an  allowance  for  a service  not  rendered. 

If  the  carriers  serving  one  locality  are  permitted  to  make 
allowances  out  of  a published  rate  of  freight,  and  the  carriers 
serving  another  locality  are  not  permitted  to  make  similar 
allowances,  there  is  discrimination  between  carriers. 

Finally,  if  the  carriers  serving  one  locality  make  an  allow- 
ance out  of  the  published  rate  of  freight,  and  the  carriers  serving 
another  locality  do  not  make  an  allowance  out  of  the  published 
rate  of  freight,  there  is  discrimination  between  localities. 

The  testimony  now  in  the  hands  of  the  Commission  shows, 
conclusively,  that  these  discriminations  are  the  daily  practice  of 
Trunk  Line  Railroads. 

Our  argument  is  here  concerned  with  the  discriminations 
suffered  by  Philadelphia.  As  already  indicated  at  page  6 of 
this  brief,  the  refiners  are  allowed  6|-c.  per  100  pounds,  out  of  the 
published  freight  rate,  for  bringing  the  sugar  to  the  railroad 
terminals.  Also,  it  is  admitted  by  counsel  of  New  York 
Trunk  Line  Railroads,  that  the  net  or  legal  rate  of  freight  is 
the  gross  rate  less  the  allowance  for  cartage.  If  this  is  true  of 
cartage,  it  is  also  true  of  lighterage,  and  the  net  or  legal  rate  is 
therefore  the  gross  rate  less  the  allowance  for  both  lighterage  and 
cartage.  To  illustrate  this  point,  let  us  take  a concrete  example. 
The  published  tariff  rate  on  sugar  from  New  York  to  Cleveland 
is  17c.  per  100  pounds.  Out  of  this  rate,  as  previously  stated,  an 
allowance  is  made  of  6^c.  per  100  pounds.  The  net  freight  rate 


10 


actually  received,  then,  on  sugar  from  New  York  to  Cleveland  is 
not  17c.,  but  lOfc.,  or  less  than  64  per  cent,  of  the  published 
freight  rate. 

In  striking  contrast  to  this  New  York-Cleveland  (623  miles) 
net  rate  of  lOfc.  is  the  Philadelphia- Cleveland  (503  miles)  net  rate 
of  15c.  With  these  two  rates  in  mind,  let  us  revert  to  the  state- 
statement  quoted  above  from  of  the  Brief  of  Counsel  for  New  York 
Trunk  Line  Railroads  (pg.  9) : ‘‘  With  reference  to  most  commod- 
“ ities,  we  have  found  that  if  we  hear  the  lighterage  expense  we 
have  reasonably  equalized  the  manufacturers  of  the  two  places. 
‘‘  It  has  been  found,  however,  that  with  respect  to  sugar,  such  con- 
“ cessions  would  be  insufficient  to  protect  sugar  interests  in  com- 
‘‘  petition  with  the  Philadelphia  refineries.”  The  significance  of 
this  statement  is  that  it  is  necessary,  after  wiping  out  the  freight 
differential,  to  further  handicap  Philadelphia  l^c.  per  100  pounds 
in  order  to  place  New  York  on  an  equal  footing  in  the  matter  of 
refining  sugar. 

Philadelphia  is  100  miles  farther  inland  than  New  York, 
and  therefore  at  an  advantage  as  to  rail  transportation  to  or  from 
the  West  and  South.  On  these  grounds,  Philadelphia  has  claimed, 
and  for  twenty-five  years  has  been  conceded  a nominal  differ- 
ential in  railroad  rates.  The  whole  fabric  of  inland  freight 
rates  has  been  built  upon  the  recognized  justice  and  propriety 
of  according  to  Baltimore  and  Philadelphia  a differential  under 
New  York  City  rates.  These  inland  differential  rates  are  the 
peaceful  outcome  of  rate  wars,  litigation,  and  bankruptcies,  and 
finally,  of  mutual  concessions  and  equitable  recognition  of  vary- 
ing local  advantages  and  disadvantages.  (See  Exhibit  E.) 

From  testimony  now  in  the  hands  of  the  Commission,  it 
appears  that,  while  Philadelphia  sugar  refiners  should  enjoy  a 
differential  of  2c.  per  100  pounds  under  New  York,  the  New 
York  and  Brooklyn  sugar  refiners  are  now  and  for  many  years 
have  been  enjoying  the  benefit  of  a differential  of  c.  per  100 
pounds  under  the  rates  actually  paid  from  Philadelphia. 

For  thirty  years  Philadelphia  has  struggled,  not  for  com- 
mercial supremacy,  but  for  commercial  existence.  In  this  con- 
nection, the  annexed  figures  in  reference  to  the  receipts  of  sugar 
respectively  at  Philadelphia,  New  York  and  Boston,  1890,  1892 
and  1907  are  significant : 


11 


1890  1892  1907 

Philadelphia,  357,117=29.44%  484,986=34.60%  339,706=17.55% 

New  Yoek,  704,507=58.08%  727,190=51.87%  1,411,714=72.95% 

Boston,  151,285=12.48%  189,603=13.53%  183,848=  9.50% 

The  total  receipts  of  sugar  at  the  three  ports  in  1890  were 
1,213,000  tons,  of  which  Philadelphia  received  357,000  tons  and 
New  York  704,000  tons.  When,  however,  in  1907,  the  total 
receipts  of  the  three  ports  had  increased  to  1,935,000  tons,  New 
York  had  doubled  her  receipts,  say  from  704,000  tons  to  1,412,- 
000  tons,  or  72.95  per  cent,  of  the  total  receipts,  while  Phila- 
delphia had  decreased  her  receipts  from  357,000  tons  to  340,000 
tons,  or  only  17.55  per  cent,  of  the  receipts  of  the  three  ports. 

In  1892,  Philadelphia  refined  within  243,000  tons  of 
as  much  sugar  as  New  York,  but  in  1907  New  York  refined 
over  1,000,000  tons  more  sugar  than  was  manufactured  at 
Philadelphia.  For  many  years  past,  Philadelphia  has  had,  and 
she  has  at  the  present  time,  modern  sugar  refining  capacity  to 
refine  100  per  cent,  more  sugar  per  annum  than  she  has  ever 
been  permitted  to  manufacture. 

During  1907  there  was  refined  at  New  York  1,411,000 
tons  sugar,  of  which  600,000  tons  were  shipped  to  Trunk  Line 
territory.  The  allowances  thereon  for  lighterage  and  cartage  at 
6^c.  per  100  pounds,  amounted  to  $825,000. 

The  following  United  States  Government  statistics  effect- 
ually dispose  of  the  familiar  cry  that  the  commerce  of  the  Port 
of  New  York  has  declined.  In  1860  the  value  of  imports  and 
exports  at  New  York  amounted  to  $301,600,000,  which  equaled 
44  per  cent,  of  the  total  imports  and  exports  of  the  United 
States,  $687,192,000.  In  1907  the  imports  and  exports  of 
New  York  had  increased  to  $1,389,000,000,  or  45  per  cent,  of 
$3,055,000,000  exports  and  imports  of  the  United  States. 

As  late  as  1880  the  total  exports  and  imports  of  the  United 
States  were  $1,503,000,000.  In  the  calendar  year  1907  the 
imports  and  exports  of  the  Port  of  New  York  amounted  to 
$1,512,000,000. 

An  interesting  and  rather  complex  situation  is  presented 
in  the  substantially  established  fact,  that  the  price  of  sugar,  say, 
in  New  York,  Boston,  Philadelphia  and  New  Orleans,  is  iden- 
tically the  same,  and  that  the  cost  of  transportation  from  point 


12 


of  manufacture  to  consumer  alone  determines  the  center  from 
which  this  necessary  of  life  shall  be  supplied.  Two  credible 
witnesses  have  stated  that  “ 2c.  per  100  pounds,  Ic.  per  100 
pounds,  Jc.  per  100  pounds,  would  divert  the  business  from 
one  locality  or  refinery  to  another.”  What,  then,  must  be  the 
effect  upon  Philadelphia  refineries  when  an  advantage  is  accorded 
to  New  York  of  4^c.  per  100  pounds  in  the  matter  of  trans- 
portation, and  a consequent  discrimination  suffered  to  that 
amount?  The  testimony  in  the  cases  cited  shows  that  the 
refineries  in  Baltimore  were  first  dried  up  and  then  dismantled. 
A process  of  drying  up  the  refineries  in  Philadelphia  has  been 
going  on  for  years,  and,  unless  equitable  and  normal  con- 
ditions are  restored  at  once,  it  is  only  natural  to  anticipate 
a dismantling  of  these  refineries  at  no  distant  date.  What 
is  true  of  sugar  is  also  true  of  grain  and  other  commod- 
ities. Philadelphia  can  hold  her  own  against  fair  com- 
petition, but  not  against  the  “Brooklyn  Handicap,  6^  per.” 
What  enterprise  can  withstand  such  great  discrimination  ? 


POINT  THREE. 

ACQESSORIALS  INCLUDED  AS  AN  INTECRAL 
PART  OF  A RATE  OF  FREICHT  DEPRIVE 
A RAILROAD  OF  REVENUE  PROPERLY 
BELONGINa  TO  IT 

If  we  assume  the  rate  on  sugar  from  Philadelphia  to 
Cleveland,  viz.,  15c.  per  100  pounds,  to  be  a reasonable  rate — and 
there  is  no  evidence  to  show  that  it  is  not — then  the  rate  from  New 
York  to  Cleveland  (for  a 10  per  cent,  longer  haul)  should  be,  say, 
17c.  per  100  pounds,  which  is  in  fact  the  published  rate.  Out  of 
this  published  rate,  as  admitted,  6-|c.  per  100  pounds  is  returned  to 
the  refiner  as  an  accessorial  allowance.  The  railroad  is  thereby 
deprived  of  over  36  per  cent,  of  the  revenue  to  which  it  is  justly 
entitled. 

Two  courses  are  open  to  railroad  companies.  Bear  the 
loss  as  long  as  they  can  stand  it  (no  business  can  run  indefinitely 
at  a loss),  or  recoup  themselves  for  the  loss  by  increasing  the 
rates  for  other  commodities  or  to  other  localities.  Increased 


13 


rates  to  other  localities  have  long  been  in  vogue.  Increase  in 
rates  for  other  merchandise  is  the  only  course  left,  and  this  course 
railroads  are  making  extensive  plans  to  follow.  Already  propa- 
ganda is  under  way  to  educate  the  public  up  to  the  necessity  of 
raising  freight  rates. 

We  do  not  offer  to  question  the  assertion  that  certain  rail- 
roads are  facing  deficits.  Nor  do  we  raise  the  issue  as  to  whether 
rates  of  freight  are  too  low,  or  too  high.  But  we  do  assert  that  an 
advance  in  rates  of  freight  is  indefensible  so  long  as  over  36  per 
cent,  of  the  gross  rate  of  freight  on  sugar  from  New  York  to 
Cleveland  is  donated  by  Trunk  Line  Railroads  to  New  York 
sugar  refiners.  (Carefully  note  Exhibit  B.) 

No  matter  whether  a deficiency  in  revenue  is  caused  by 
rebating,  or  by  allowances,  which  may  readily  be  rebates  in  thin 
disguise,  the  ultimate  effect  is  the  same.  By  process  of  infiltra- 
tion, the  pernicious  practice  of  making  allowances  out  of  rates  of 
freight  reaches  every  part  of  the  railroads’  financial  system. 
Someone  must  pay  for  such  economic  waste.  Shall  men  be 
discharged,  wages  cut,  or  freight  rates  advanced  that  New  York 
Sugar  Refiners  may  be  able  to  mace  the  railroads  into  paying 
them  enormous  sums  of  money  annually  for  comparatively 
inexpensive  services  ? 

The  actual  profit  on  accessorials  to  New  York  refiners  is 
about  4c.  per  100  pounds.  The  Philadelphia  refiners,  strangely 
enough,  pay  a net  freight  rate  4c.  higher  than  the  New  York  net 
freight  rate.  This  we  offer  as  a striking  illustration  of  the  practical 
effect  of  railroads  recouping  themselves  for  discriminations  prac- 
ticed in  favor  of  refiners  in  one  locality,  by  exacting  excessive 
freight  charges  from  refiners  in  another  locality.  To  follow  our 
previous  illustration,  either  the  net  Philadelphia-Cleveland  rate 
is  too  high,  or  the  net  New  York-Cleveland  rate  is  too  low.  If 
the  latter  be  true,  then  the  entire  public  ought  not  to  suffer  by  a 
general  increase  in  freight  rates,  but  rather  those  rates  which  are 
now  too  low  ought  to  be  advanced.  In  either  event,  there  should 
be  a readjustment  of  rates.  If  railroads  are  making  a fair  return 
on  their  investments,  the  Philadelphia-Cleveland  rate  should  be 
scaled  down,  and  the  New  York-Cleveland  rate  should  be 
increased  to  maintain  a proper  balance.  If  railroads  are  not 
making  a fair  return  on  their  investments,  and  they  declare  they 
are  not,  then  it  follows  as  by  demonstration,  that  the  enormous 


14 


charges  fixed  upon  them  by  the  payment  of  accessorials  in  New 
York  must  be  a prominent  factor  in  causing  the  aggregate 
deficiency.  From  the  foregoing  it  is  evident  that  allowances 
for  accessorials  do  deprive  the  railroads  each  year  of  millions  of 
revenue  properly  belonging  to  them. 

Accessorial  allowances  should  therefore  be  shifted  so  as  to  be 
borne  by  the  proper  parties.  That  is  to  say,  that  railroads  should 
themselves  perform  all  the  services  which  are  essentially  a part 
of  rail  transportation.  If  they  are  called  upon  to  perform  addi- 
tional services,  a fair  compensation  should  be  received  therefor. 
In  no  case  should  an  allowance  for  the  performance  of  essentially 
rail  transportation  or  any  additional  service  be  made  out  of  the 
freight  rate.  Terminal  allowances  are  undoubtedly  manipulated 
elsewhere  as  in  New  York  with  intent  to  hinder,  to  delay,  and  to 
circumvent  The  Interstate  Commerce  Commission  in  its  just  and 
beneficent  administration  of  the  law. 


POINT  FOUR. 

THE  LONG  CONTINUED  PRACTICE  OF  PAYING 
ACCESSORIAL  EXPENSES  OUT  OF  THE 
FREIGHT  RA  TE,  THE  INTEREST  OF  PO  WER- 
FUL  PATRONS  PROFITING  THEREBY,  AND 
THE  PRESSURE  OF  COMPETITION  MAKE  IT 
IMPOSSIBLE  FOR  THE  RAILROAD  COM- 
PANIES ON  THEIR  OWN  INITIATIVE  TO 
ACCOMPLISH  ANY  RADICAL  CHANGE. 

It  has  been  testified  in  the  cases  cited  that  accessorial  allow- 
ances date  back  at  least  twenty-five  years,  and  that  they  are  there- 
fore firmly  established.  It  has  been  testified  that  the  sugar 
traffic  of  the  parties  benefited  by  these  particular  allowances 
represents  30  per  cent,  of  the  westbound  tonnage  from  the  Port 
of  New  York.  It  is  well  known  that  the  sugar  refiners  of  New 
York  sell  their  sugars  f.  o.  b.  New  York,  to  which,  they  state,  they 
add  the  Philadephia  rate  of  freight  to  destination.  It  is  notorious 
that  the  manufacture  of  sugar  in  the  United  States  is  controlled  by 
the  American  Sugar  Refining  Company.  (See  Exhibit  D.)  It  is 
only  natural  that  the  sugar  refiners,  having  first  obtained  absolute 


15 


monopoly  of  the  shipping  and  routing  of  their  refined  product, 
should  then  seek  ways  and  means  to  use  that  control  for  their  own 
ends.  The  result  has  been  that  the  New  York  Trunk  Line  Rail- 
roads have  been  compelled,  upon  threat  of  removal  of  refineries  to 
other  sections  of  the  United  States,  to  submit  to  the  demands  of  the 
New  York  refining  interests,  and  to  make  the  extravagant  allow- 
ances for  alleged  services  of  lighterage  and  cartage  amounting  to 
file,  per  100  pounds.  The  immense  refinery  now  in  course  of 
construction  by  the  American  Sugar  Refining  Company  in  New 
Orleans  is  an  additional  club  with  which  that  sugar  refining 
interest  will  be  able,  under  existing  conditions,  to  compel  a con- 
tinuance of  the  practice  of  making  accessorial  allowances  by 
Trunk  Line  Railroads,  through  fear  of  diversion  of  business  to 
other  communities  and  railroads,  e.  g.^  City  of  New  Orleans, 
Illinois  Central  Railroad.  Without  doubt  there  are  other 
interests  than  sugar,  also  powerful,  that  are  benefited  by  similar 
accessorial  allowances.  It  is  obvious  that  no  single  railroad,  and 
perhaps  not  all  of  the  railroads  combined,  could,  unaided  by  The 
Interstate  Commerce  Conmmission,  safely  inaugurate  the  radical 
change  imperatively  demanded  in  the  present  practice  of  making 
allowances  out  of  freight  rates. 


POINT  FIVE. 

AS  THE  ACCESSORIAL  REQUIREMENTS  OF 
SHIPPERS  OR  CONSICNEES  VARY  IN 
ALMOST  EVERY  INDIVIDUAL  CASE,  QUES- 
TIONS CROWING  OUT  OF  CONDITIONS 
SIMILAR  IN  PRINCIPLE  TO  THOSE  NOW 
BEFORE  THE  COMMISSION  WILL  BE  MUL- 
TIPLIED TO  SUCH  AN  EXTENT  THAT  THE 
C03IMISSI0N  WILL  SOON  BE  OVER- 
WHELMED BY  A VAST  NUMBER  OF 
COMPLAINTS. 

Testimony  in  the  two  sugar  cases  cited  "shows  that  some 
refiners  load  their  product  directly  into  cars ; some  cart  it  one 
block  ; some  one-half,  or  three-fourths  of  a mile  ; some  cart  part, 
and  load  part  into  cars ; some  lighter  their  product  one  mile  and 


16 


some,  perhaps,  ten  miles ; and  one  complainant  asks  that  the 
lighterage  limit  of  the  Port  of  New  York  be  further  extended 
ten  miles  in  order  to  meet  his  particular  needs.  (See  Exhibit 

The  whole  situation  has  been  admirably  summed  up  in  the 
following  manner  by  members  of  The  Interstate  Commerce 
Commission : 

(Case  1487,  page  48.)  Commissioner  Clark  says,  in  regard 
to  the  allowance  of  2c.  per  100  pounds  for  cartage : 

“ If  it  is  lawful  as  to  sugar,  which  forms  30  per  cent,  of 
the  tonnage,  and  which  involves  all  these  great  interests, 
“ it  is  lawful  for  every  other  commodity.  If  it  is  lawful  in 
“ NewYork,  it  is  lawful  everywhere  else.  This  is  the  way 
‘‘  the  Commission  has  to  look  at  it.  They  cannot  make  any 
“ decision  that  it  is  lawful  to  make  an  allowance  of  that 
“ kind  on  sugar  and  refuse  it  on  soap  and  hay.” 

(Case  1487,  page  60.) 

The  Chairman  : So  where  does  the  thing  end  ? If 
‘‘  you  can  make  a rate  on  grain  from  a country  station,  can 
“ you  not  say,  ‘We  will  allow  the  farmer  5c.  per  bushel  for 
“ bringing  it  in  ? ’ Where  does  the  thing  end  ? That  is,  if 
“ you  can  allow  out  of  your  transportation  rate  some  com- 
“ pensation  for  the  expense  incurred  in  bringing  traffic  to 
“ your  cars,  where  will  the  thing  end?  ” 

If  this  great  disparity  of  requirements  exists  in  one  com- 
modity, and  one  locality,  how  much  more  is  it  true  of  many  com- 
modities, in  many  localities  ? How  impossible  it  will  be  to  adjust 
equitably  the  conflicting  claims  in  the  various  cases  which  may 
arise,  so  long  as  present  practices  are  permitted  to  prevail ! So 
many  complaints  would  be  brought  before  The  Commission  that 
its  entire  time  would  be  taken  up  with  this  one  subject. 


POINT  SIX. 

IT  WILL  BE  FOUND  IMPOSSIBLE  TO  DECIDE 
EQUITABLY  BETWEEN  CONELIOTINU  IN- 
TERESTS IN  A MULTITUDE  OF  SUBSTAN- 
TIALLY ANALOGOUS  OASES. 

Where  so  many  interests  are  involved  ; where  there  are  so 
many  varying  conditions  concerned ; where  each  case  will  have 


17 


features  peculiar  to  itself ; where  so  many  nice  distinctions  will 
be  drawn  ; where  the  most  sincere  effort  to  be  just  to  one  interest 
may  result  in  unintentional  injustice  to  another  interest — in  all 
these  cases,  we  believe  that  it  will  be  impossible  for  any  human 
tribunal  to  so  infallibly  decide,  as  not  to  conflict  with  its  own 
decisions  in  numerous  other  cases.  We  believe  that  it  is  impossi- 
ble to  administer  equitably  a practice  vhich  is,  in  itself, 
essentially  inequitable. 


POINT  SEVEN. 

THE  ONLY  COURSE  OPEN  TO  THE  INTERSTATE 
COMMERCE  C03IMISS10N  IS  TO  LAY  DOWN 
AN  EQUITABLE  PRINCIPLE  APPLICABLE 
IN  GENERAL  TO  ALL  CASES  WHICH  MAY 
ARISE. 

To  avoid  the  endless  amount  of  work  which  would  be 
imposed  upon  The  Commission  and  the  impossibility  of  doing 
equal  justice  to  all  under  the  present  practice,  the  only  possible 
course  for  The  Interstate  Commerce  Commission  to  pursue  is  to 
find  an  underlying  principle  which  will  apply  to  all  such  cases, 
and  to  base  all  of  their  decisions  upon  this  principle. 


POINT  EIGHT. 

THE  ONLY  PRINCIPLE  WHICH  WILL  APPLY 
GENERALLY  TO  ALL  CASES  IS  A COM- 
PLETE SEPARATION  OF  THE  RATE  FOR 
RAIL  TRANSPORTATION  FROM  THE  RATES 
FOR  ACCESSORIALS. 

The  sixth  section  of  the  Interstate  Commerce  Act  (para- 
graph one)  provides  that  all  terminal  charges,  etc.,  etc.  (that  is 
all  accessorials),  shall  be  published  separately.  This  implies  a 
complete  separation  of  the  rate  for  rail  transportation  from  the 
rates  for  accessorials.  The  intention  of  the  Act,  however,  has 
been  completely  nullified  by  a narrow  interpretation  of  this 


18 


paragraph ; for,  while  under  the  present  practice  the  rates  for 
accessorials  are  stated,  they  are  stated  as  an  integral  part  of  the 
published  freight  rate  so  that  the  shipper  who  loads  directly  into 
cars  is  compelled  to  pay  the  same  lighterage  or  other  accessorial 
allowance  as  the  one  who  requires  the  maximum  accommodation 
in  the  way  of  accessorials.  It  is  therefore  submitted  that  the  rail 
rate  also  should  be  published  separately,  thus  allowing  one  or  all 
to  be  availed  of  by  each  individual  shipper  according  to  his 
special  requirements. 

The  Interstate  Commerce  Commission  has  just  issued 
“ Classification  of  Revenue  and  Expenses  for  Outside  Opera- 
tions— first  issue — effective  July  1,  1908  ” : 

The  following  appears  on  page  5|: 

“ Outside  operations  are  facilities  operated  or  services 
“ rendered  by  a railway  other  than  those  incident  to  trans- 
“ portation  by  rail  * * * *.  Transportation  by  rail  includes 
‘‘  the  receipt,  transportation  and  delivery  of  traffic,  such 
storage  of  freight  as  is  necessary  to  the  operation  of  the 
railway,  all  special  facilities  necessary  to  the  handling  of 
special  classes  of  traffic,  such  as  coal  and  ore  docks,  coal 
“ transfers,  and  facilities  for  the  receipt  and  delivery  of  live 
“ stock,  and  such  car  ferries  as  are  actual  substitutes  for 
bridges  and  tunnels.  It  does  not  include  local  collection 
‘‘  and  delivery  (except  switching)  or  transportation  by  water, 
“ except  car  ferries  as  above  provided.” 

Under  account  No.  3 — “Harbor  Terminal  Transfers,” 
page  32 — we  quote  as  follows : 

“ This  classification  applies  to  the  services  of  trans- 
“ ferring  freight  and  passengers  in  cars  by  water  between 
“ the  terminal  of  a rail  line  and  a station  of  the  same  line 
“without  direct  rail  connection,  or  between  the  terminal  of 
“ a rail  line  and  the  tracks  of  the  connecting  carrier,  and  to 
“ the  receipt  and  delivery  of  less  carload  freight  between  the 
“ carrier’s  terminals,  and  docks,  wharves,  landings,  and  steam- 
“ ships,  and  to  the  receipt  and  delivery  of  cattle,  grain,  and 
“ other  freight  in  bulk  in  lighters,  barges,  and  other  vessels : 
“ and  covers  the  transfers  operated  in  New  York  Harbor  and 
“ analogous  operations  elsewhere,  if  any.  * * * * The  cost 
“ of  cartage  and  truckage  performed  to  complete  deliveries 
“ should  not  be  charged  to  outside  operation.” 

It  will  thus  be  seen  that  in  these  'definitions  the  line  has 
been  sharply  drawn  between  rail  transportation  and  outside 


19 


operations.  If  the  revenue  and  expenses  of  outside  operations 
are  to  be  completely  separated  from  rail  transportation  as  a 
principle  of  accounting,  still  more  is  it  necessary  that  outside 
operation  (accessorials)  should  be  separated  from  rail  trans- 
portation as  a principle  of  rate  making. 

If  each  item  of  rate  be  stated  separately  in  the  published 
tariff,  that  is,  that  the  rate  for  rail  transportation  is  so  much, 
and  the  rate  for  lighterage  is  so  much,  and  the  rate  for  cartage 
is  so  much,  etc.,  etc.,  then  each  shipper  will  avail  himself  of 
as  much  or  as  little  of  the  facilities  offered,  as  his  particular 
needs  may  require,  and  he  will  pay  the  published  rates  for 
what  he  actually  receives,  and  for  nothing  more.  The  shipper 
in  Jersey  City  who  loads  his  product  into  cars  will  pay  only 
for  rail  transportation.  The  shipper  in  Brooklyn  who  loads 
his  merchandise  into  lighters,  or  on  to  floats  alongside  his 
wharf,  will  pay  for  lighterage  and  rail  transportation.  The 
shipper  in  Brooklyn  who  carts  his  merchandise  to  lighters  will 
pay  for  cartage,  and  lighterage,  and  rail  transportation.  Each 
therefore  will  have  the  exact  advantage  or  disadvantage  of  his 
location,  and  can  avail  himself  of  such  services  as  will  meet 
his  special  requirements. 

The  merchant  will  no  longer  be  charged  a pro  rata  share 
for  the  cost  of  services  he  does  not  desire,  require,  or  avail  of. 
The  discriminations  now  practiced  with  such  blighting  effect  will 
be  no  longer  possible.  Finally,  the  favorite  form  of  rebating 
still  in  constant  use,  known  as  an  allowance,  will  be  effectually 
eliminated. 

The  railroads  would  thus  be  relieved  of  a very  serious 
problem  in  making  an  equitable  adjustment  of  rates.  They 
could  fix  reasonable  rates  for  rail  transportation  that  would  not 
be  confused  with  the  cost  of  outside  operations,  while  the  cost  of 
outside  operations  (accessorials)  would  be  paid  for  by  those  only 
who  made  use  of  them.  The  present  serious  drain  on  the 
revenues  of  the  Railroad  Companies  from  forced  concessions  to 
powerful  interests  in  the  way  of  accessorial  allowances  would  be 
stopped,  and  the  existing  unfortunate  position  of  the  Railroad 
Companies,  between  decreasing  rates  and  increasing  expenses, 
would  to  this  extent  be  relieved. 

For  many  years  we  have  known  the  facts  brought  out  in 
these  two  sugar  cases,  but  to  produce  the  legal  proof  of  our 


20 


knowledge  was  difficult  to  accomplish.  Now,  however,  the 
sworn  testimony  of  officials  of  Trunk  Line  Railroads,  and  of 
New  York  Sugar  Refining  Companies  has  unequivocally  and 
indisputably  established  the  facts.  On  these  facts  we  rest  our 
case. 

We  offer  the  foregoing  statement  as  one  illustration  of 
discrimination  and  rebating  made  possible  by  the  manipulation 
of  accessorial  charges  or  allowances.  Similar  manipulation 
produces  like  results  in  many  other  commodities,  in  many 
other  localities. 

The  remedy  for  these  illegal  practices — and  we  believe  it 
to  be  the  only  remedy — was  pointed  out  sixteen  years  ago  by  so 
eminent  an  authority  in  matters  of  transportation  as  the  late 
Col.  Joseph  D.  Potts: 


“We  must  have  a separation  of  terminal  and 
“ transfer  charges,  from  the  road  charges.^ 

Respectfully  submitted. 


WARD  W.  PIERSON, 

Counsel. 


FRANK  L.  NEALL. 


21 


EXHIBIT  A. 

(INDEX.) 

EXHIBIT  “A’'  is  a series  of  sketches  showing: 

First. — The  Port  of  New  York  with  the  location  of 
the  principal  Railroads  and  Steamship  Lines.  Also  the 
eight  sugar  refineries  lettered  from  ‘‘A”  to  H ” inclusive. 
Those  having  track  connections  being  indicated  by  white 
circles.  The  distances  from  St.  George,  Staten  Island,  to 
Yonkers  and  intermediate  points  are  taken  from  the  testimony 
in  the  Federal  Sugar  Refining  Co.  case. 

Second. — The  refinery  of  the  National  Sugar  Refin- 
ing Co.,  at  Yonkers,  having  direct  track  connection 
with  the  N.  Y.  C.  and  H.  R.  R.  R.  This  refinery  is  com- 
monly supposed  to  be  closely  affiliated  with  the  American 
Sugar  Refining  Co. 

Third. — The  refinery  of  the  Federal  Sugar  Refining 
Co.,  at  Yonkers,  having  direct  track  connection  with  the  N. 
Y.  C.  and  H.  R.  R.  R.  Popularly  called  the  Spreckles 
Refinery. 

Fourth. — The  refinery  of  the  Warner  Sugar  Refining 
Co.,  at  Edgewater,  N.  J.,  having  on  the  property  an  Erie 
Railway  track  under  construction  but  not  yet  in  operation. 

Fifth. — The  refinery  of  the  American  Sugar  Refining 
Co.  (formerly  Matthewson  & Wickers  Refinery),  in  Jersey 
City,  N.  J.,  having  a Penna.  R.  R.  track  on  three  sides  of 
buildings. 

Sixth. — The  refinery  of  the  American  Sugar  Refining 
Co.  (formerly  Havemeyer  & Elder  Refining  Co.),  in  Brook- 
lyn, and  in  close  proximity,  the  tracks  of  the  Brooklyn 
Eastern  District  Terminal  Co.  (formerly  Palmers  Docks), 
owned  and  operated  by  the  parties  composing  the  firm  of 
Havemeyer  & Elder.  Most  of  the  product  of  the  Havemeyer 
& Elder  Refinery  is  shipped  from  this  Terminal. 

Seventh. — The  Arbuckle  Bros.  Sugar  Refinery  and 
adjoining  the  same,  the  tracks  of  the  Jay  Street  Terminal 


22 


over  which  most  of  the  product  of  the  refinery  is  shipped, 
and  which  is  owned  and  operated  by  the  parties  composing 
the  firm  of  Arbuckle  Bros. 

Eighth.  — The  New  York  Refinery  in  Long  Island 
City,  owned  by  the  National  Sugar  Refining  Co.,  and  having 
tracks  alongside  with  a capacity  of  over  20  cars. 

Ninth. — The  Mollenhauer  Refinery  in  Brooklyn, 
owned  by  the  National  Sugar  Refining  Co.,  but  not  operated 
for  five  years.  It  is  used  only  for  the  storage  of  sugar. 

Tenth. — A diagram  showing  the  PROPORTION  of 
certain  freight  rates  that  is  RETURNED  to  the  shipper  as 
an  allowance  for  lighterage,  cartage,  etc.,  and  the  PRO- 
PORTION that  is  RETAINED  by  the  R.  R.  Co.  for  actual 
transportation.  This  diagram  illustrates  graphically  the 
gross  inequality  between  published  freight  rates  which 
cover  rail  transportation  only,  and  published  freight  rates  on 
the  same  commodities  out  of  which  an  allowance  is  made  for 
accessorial  charges  or  service. 


23 


EXHIBIT  B. 

Washington,  June  26,  1897. 

The  House  Committee  on  Interstate  and  Foreign  Commerce 
today  gave  a hearing  to  representatives  from  New  York. 

Mr.  Erastus  Wiman  stated  that  the  Interstate  Commerce 
Law  as  it  existed  permitted  the  perpetuation  of  terminal  charges 
in  the  harbor  of  New  York  greater  than  existed  elsewhere  in  the 
world.  * * ♦ These  terminal  charges  took  on  the  shape  of 

lighterage,  or  the  cost  of  transfer  from  the  car  to  the  ship  side. 
* * * This  amounted  in  the  aggregate  to  probably  $10,000,- 

000  a year,  a tribute  not  exacted  in  any  rival  port. 

Four-fifths  of  the  products  arriving  at  the  chief  port  of  the 
country  (New  York)  were  received  at  Jersey  City,  were  stored 
in  Brooklyn,  and  were  shipped  from  New  York.  It  was  im- 
possible to  conceive  of  an  arrangement  more  cumbersome,  so  full 
of  delay  and  so  costly. 


In  the  Evening  Post  of  October  19,  1896,  in  a leading 
article  entitled  ‘‘Menaces  to  New  York,”  the  following  statement 
is  made : 

“ This  circumstance  justifies  a statement  of  serious 
import  to  this  city  (New  York)  not  long  ago  made  by  Sir 
William  C.  YanHorne  (Chairman  of  the  Canadian  Pacific 
Railroad  Co.)  that  he  could  transport  a barrel  of  fiour  from 
the  dock  in  Montreal,  Canada,  to  the  dock  in  Liverpool, 
England,  at  a less  rate  than  it  cost  to  handle  it  in  the 
harbor  of  New  York.” 


24 


COMPARISON  OF  ALLOWANCES  FOR  CART  ACE 
AND  LiaHTERACE  ON  SUCAR  IN  THE 
HARBOR  OF  NEW  YORK  WITH  RATES  OF 
FREIGHT  ON  SUGAR  AND  OTHER  COM- 
MODITIES IN  OTHER  LOCALITIES. 

Allowance  by  Trunk  Line  Railroads 
to  New  York  refiners  of  sugar, 
to  cover  alleged  cost  of  trans- 
ferring one  ton  of  refined  sugar 
from  Brooklyn,  N.  Y.,  to  Jersey 
City,  N.  J.,  say  lighterage  4|-c. 
per  100  pounds,  cartage  2c.  per 
100  pounds  — G^c.  per  100 

pounds,  or J1.39  per  ton  2240  pounds. 

Rate  of  freight  on  JAVA  sugar, 

Liverpool,  England,  to  Brook- 
lyn, N.  Y.,  3450  miles 1.35  per  ton  2240  pounds. 

Rate  of  freight  on  BEET  sugar, 

Hamburg,  Germany,  to  Brook- 
lyn, N.  Y.,  4100  miles 1.35  per  ton  2240  pounds. 

Note. — The  above  sugars  are  brought  respectively  from  Liverpool,  England, 
(3450  miles)  and  from  Hamburg,  Germany  (4100  miles)  direct  to  the 
docks  of  the  sugar  refineries  at  Brooklyn.  N.  Y.,  and  there  discharged 
at  a total  freight  cost  of  $1.35  per  ton  of  2240  pounds.  The  Trunk 
Line  Railroad  Companies  at  New  York  ultimately  allow  the  refiners 
there  for  subsequently  transferring  this  identical  sugar,  when  refined, 
from  the  refineries  at  Brooklyn,  N.  Y.,  to  the  Jersey  City  terminals,  say 
a distance  of  from  3 to  5 miles,  2c.  per  100  pounds  for  cartage  and  4^c. 
per  100  pounds  for  lighterage,  or  say  $1.39  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Buffalo, 

N,  Y.,  to  Duluth,  Minn,  (by 

water),  985  miles 30c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Superior  (Duluth),  Minn.,  to 
Cleveland,  0.  (by  water),  834 

miles  70c.  per  ton  2240  pounds. 

Rate  of  freight  on  CORN,  Chicago, 

111.,  to  Buffalo,  N.Y.  (by  water), 

900  miles 40c.  per  ton  2240  pounds. 


25 


Rate  of  freight  on  WHEAT,  Duluth, 

Minn.,  to  Buffalo,  N.  Y.  (by 

water),  985  miles 60c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Superior  (Duluth),  Minn.,  to 
Buffalo,  N.  Y.  (by  water),  985 

miles  70c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Philadelphia,  Pa.,  to  Bethlehem, 

Pa.  (by  rail),  57  miles 50c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Philadelphia  to  Pottstown,  Pa. 

(by  rail),  41  miles 50c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Philadelphia,  Pa.,  to  Birdsboro, 

Pa.  (by  rail),  49  miles 60c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Philadelphia, Pa., to  Catasauqua, 

Pa.  (by  rail),  66  miles 70c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Philadelphia  to  Harrisburg,  Pa. 

(by  rail),  112  miles 70c.  per  ton  2240  pounds. 

Rate  of  freight  on  IRON  ORE, 

Philadelphia  to  Steelton,  Pa. 

(by  rail),  102  miles 70c.  per  ton  2240  pounds. 

Rate  of  freight  on  PIGr  IRON, 

Conshohocken,  Pa.,  to  Philadel- 
phia (by  rail),  13 J miles 60c.  per  ton  2240  pounds. 

Rate  of  freight  on  PIG  IRON, 

South  Bethlehem,  Pa.,  to  Phila- 
delphia (by  rail),  57  miles 65c.  per  ton  2240  pounds. 

Rate  of  freight  on  PIG  IRON, 

Emaus,  Pa.,  to  Philadelphia  (by 

rail),  62  miles 75c.  per  ton  2240  pounds. 

Rate  of  freight  on  PIG  IRON, 

Wharton,  N.  J.,  to  Philadel- 
phia (by  rail),  140  miles 80c.  per  ton  2240  pounds. 

Rate  of  freight  on  IMPORTED 
ORE,  Philadelphia  to  Chester, 

Pa.  (by  rail),  18  miles 50c.  per  ton  2240  pounds* 


26 


Rate  of  freight  on  BARK,  Philadel- 
phia to  Park  Junction,  Pa.  (by 
rail),  9 miles i 


56c.  per  ton  2240  pounds. 


Rate  of  freight  on  PIG  IRON, 
Philadelphia  to  Parryville,  Pa. 
(by  rail)  84  miles 


85c.  per  ton  2240  pounds. 


Rate  of  freight  on  PIG  IRON, 
New  York,  N.  Y.,  to  Wharton, 


N.  J.  (by  rail — includes  lighter- 
age), 78  miles I 


90c.  per  ton  2240  pounds. 


Rate  of  freight  on  SPIEGELEISEN, 
New  York  to  Rockaway,  N.  J. 
(by  rail — includes  lighterage), 
87  miles..  i 


$1.15  per  ton  2240  pounds. 


Allowance  by  Trunk  Line  Railroads 
to  New  York  refiners  of  sugar 
to  cover  alleged  cost  of  transfer- 
ring one  ton  of  refined  sugar  from 
Brooklyn,  N.  Y.,  to  Jersey  City, 

N.  J.,  say  lighterage  4|-c.  per 
100  pounds,  cartage  2c.  per  100 
pounds  = 6ic.  per  100  pounds, 

or $1.39  per  ton  2240  pounds. 


Rate  of  freight  on  ICE,  Kennebec, 

Maine,  to  Philadelphia,  Pa.  (by 

water),  580  miles 50c.  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Lambert’s 
Point  to  New  London,  Conn. 

(by  water),  395  miles 60c.  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Philadel- 
phia to  Boston,  Mass,  (by  water), 

450  miles 60c.  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Philadel- 
phia, Pa.,  to  St.  John,  N.  B.  (by 

water),  665  miles 85c.  per  ton  2240  pounds. 


27 


Rate  of  freight  on  COAL,  Philadel- 
phia to  Halifax,  N.  S.  (by 

water),  725  miles 90c.  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  New 
York  to  Dartmouth,  N.  S.  (by 

water),  610  miles 90c.  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Hampton 
Roads,  Va.,  to  Charleston,  S.  C. 

(by  water),  412  miles $1.00  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Philadel- 
phia to  Havana,  Cuba  (by  water), 

1140  miles 1.10  per  ton  2240  pounds. 


Rate  of  freight  on  ORE,  Mediterra- 
nean to  Philadelphia-Baltimore 

(by  water),  3700  miles 

Rate  of  freight  on  COAL,  Philadel- 
phia to  Tampico,  Mexico  (by 

water),  1954  miles 

Rate  of  freight  on  SUGAR,  Stettin, 
Germany,  to  New  York  (by 

water),  4600  miles 

Rate  of  freight  on  WEIGHT 
GOODS,  Rotterdam,  Holland, 
to  New  York  (by  water),  3769 
miles 


1.25  per  ton  2240  pounds. 


1.35  per  ton  2240  pounds. 


1.40  per  ton  2240  pounds. 


1.50  per  ton  2240  pounds. 


Rate  of  freight  on  MAGNESITE, 

New  York  to  Chester,  Pa.  (by 
rail — includes  lighterage),  108 

miles 2.12  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Hoboken, 

N.  J.,  to  Camden,  Maine  (by 

water),  435  miles 50c.  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Port 
Reading,  N.  J.,  to  Bangor, 

Maine  (by  water),  410  miles... 50c.  per  ton  2240  pounds. 
Rate  of  freight  on  COAL,  Perth 
Amboy,  N.  J.,  to  Winter  Point, 

Maine  (by  water),  435  miles 70c.  per  ton  2240  pounds. 


28 


Allowance  by  Trunk  Line  Railroads 
to  New  York  refiners  of  sugar 
to  cover  alleged  cost  of  transfer- 
ring one  ton  of  refined  sugar  from 
Brooklyn,  N.  Y.,  to  Jersey  City, 

N.  J.,  say  lighterage  4ic.  per 
100  pounds,  cartage  2c.  per  100 

pounds  — 6|-c.  per  100  pounds. .$1.39  per  ton  2240  pounds. 


Rate  of  freight  on  WHEAT,  New 
York  to  Liverpool,  England  (by 

water),  3450  miles 1 

Rate  of  freight  on  WHEAT,  New 
York  to  Manchester,  England 

(by  water),  3545  miles 

Rate  of  freight  on  CORN,  New  York 
to  London,  England  (by  water), 

8775  miles 

Rate  of  freight  on  CORN,  New 
York  to  Glasgow,  Scotland  (by 

water),  3423  miles 

Rate  of  freight  on  WHEAT,  New 
York  to  Rotterdam,  Holland 

(by  water),  3769  miles 

Rate  of  freight  on  CORN,  New  York 
to  Copenhagen,  Denmark  (by 

water),  4400  miles 

Rate  of  freight  on  SALT,  Liverpool 
to  Quebec,  Canada  (by  water), 

2970  miles  

Rate  of  freight  on  CHALK,  Dunkirk, 
France,  to  New  York  (by  water), 

3593  miles 

Rate  of  freight  on  COAL,  Philadel- 
phia to  Savona,  Italy  (by  water), 

4300  miles. 

Rate  of  freight  on  SUGAR,  Ham- 
burg, Germany,  to  New  Orleans, 
La.  (by  water),  5584  miles 


)1.20  per  ton  2240  pounds. 
1.20  per  ton  2240  pounds. 
1.20  per  ton  2240  pounds. 
1.20  per  ton  2240  pounds. 
1.30  per  ton  2240  pounds. 
1.40  per  ton  2240  pounds. 
1.13  per  ton  2240  pounds. 
1.47  per  ton  2240  pounds. 
1.53  per  ton  2240  pounds. 
1.50  per  ton  2240  pounds. 


29 


Rate  of  freight  on  SUGAR,  Liver- 
pool to  Montreal,  Canada  (by 

water),  8167  miles $1.35  per  ton  2240  pounds. 

Rate  of  freight  on  SUGAR,  Matan- 
zas  & Cardenas,  Cuba,  to  Brook- 
lyn (by  water),  1300  miles 1.35  per  ton  2240  pounds. 

Rate  of  freight  on  ORE,  Porman, 

Spain,  to  Cape  Breton  (by 

water),  4000  miles 1.16  per  ton  2240  pounds. 

Rate  of  freight  on  COAL,  Newcastle 
on  Tyne,  England,  to  Quebec, 

Can.  (by  water),  3600  miles 1.16  per  ton  2240  pounds. 


Rate  of  freight  on  SIXTH  CLASS  GOODS  : 


New  York  to  Elizabeth,  N.  J.  (by 

rail),  12  miles 

New  York  to  Perth  Amboy,  N.  J. 

(by  rail),  21  miles 

New  York  to  South  Amboy,  N.  J. 

(by  rail),  24  miles 

New  York  to  Lorillard,  N.  Y.  (by 

rail),  83  miles 

New  York  to  Freehold,  N.  J.  (by 

rail),  41  miles 

New  York  to  Plainfield,  N.  J.  (by 

rail),  24  miles 

New  York  to  Bound  Brook,  N.  J. 

(by  rail),  31  miles 

New  York  to  Long  Branch,  N.  J. 

(by  rail),  50  miles 

New  York  to  Atlantic  Highlands  (by 
rail),  40  miles 


$1.12  per  ton  2240  pounds. 
1.12  per  ton  2240  pounds. 
1.23  per  ton  2240  pounds. 
1.56  per  ton  2240  pounds. 
1.56  per  ton  2240  pounds. 
1.34  per  ton  2240  pounds. 
1.56  per  ton  2240  pounds. 
1.79  per  ton  2240  pounds. 
1.79  per  ton  2240  pounds. 


30 


EXHIBIT  C. 

TRANSPORTATION  OF  JAVA  SUGAR  FROM 
PRODUCER  TO  CONSUMER. 


Place  of 
Shipment. 

Destination. 

Distance. 

Time  occupied 
in  movement. 

Transportation  Rates. 

Charge  for 
Transportation 

Days. 

Hours. 

per  ton  2240  fcs. 

Samarang, 

Java. 

Liverpool , 
England. 

9,686  miles 

50 

0 

21s.  3d.  per  ton 

$5.10  per  ton 

Liverpool, 

England. 

Brooklyn, 

N.  Y. 

3,500  miles 

15 

0 

58.  6d.  per  ton 

1.32  per  ton 

Brooklyn, 

N.  Y. 

Jersey  City, 

N.  J. 

5 miles 

0 

5 

61c.  per  100  lbs. 

1.39  per  ton 

Jersey  City, 

N.  J. 

Cleveland, 

Ohio. 

625  miles 

5 

0 

17c.  per  100  lbs. 

Less  61c.  “ “ 

drayage  & 
hauling 

10|c.  per  100  lbs. 
Net  rate  Jersey  City 
to  Cleveland,  Ohio. 

2.41  per  ton 

Total  13,816  miles,  Samarang,  Java,  to  Cleveland,  Ohio,  $10.22 
per  ton,  equal  to  73c  per  ton  per  1000  miles. 


Total  distance  raw  and  refined  sugar  carried  13,816  miles. 

Cost  per  1000  miles,  average  over  entire  distance, 

73c.  per  ton  of  2240  pounds. 

Accessorial  allowances  by  New  York  Trunk  Line 
Railroads,  say  61-c.  transferring  from  Sugar 
Refineries,  Brooklyn,  N.  Y.,  to  Jersey  City, 

N.  J.,  5 miles,  $1.39  per  ton,  say  on  basis  of 

73c.  per  1000  miles  equals  a distance  of 1,904  miles. 


Rate  of  Freight,  New  York  (Brooklyn)  to  Cleveland,  Ohio,  17c. 
per  100  pounds  of  which  the  accessorial  allowance  made  to 
Sugar  Refineries  for  drayage  2c.  and  lighterage  4ic.  per 
100  pounds,  aggregating  more  than  36  per  cent,  of  Gross 
Inland  Freight  Rate. 


31 


EXHIBIT  D. 

S UGAR  REFINING  PLANTS— L 0 QA  TED  AT  NEW 
YORK,  PHILADELPHIA,  BOSTON,  AND  NEW 


ORLEANS. 

AMERICAN  SUGAR  REFINING  CO. 
(Sugar  Trust) 

Plants  owned  or  controlled. 

INDEPENDENT  SUGAR  REFINERIES. 

NEW  YORK. 

1.  American  1 Sugar  Kefining  Co. , 

New  York. 

2.  American  Sugar  Kefining  Co. , 

New  Jersey. 
(Havemeyer  & Elder,  Brooklyn.) 

3.  American  Sugar  Refining  Co. , 

Jersey  City. 
(Formerly  Matthewson  & 
Wickers  Sugar  Refinery.) 

4.  National  Sugar  Refining  Co., 

Yonkers,  N.  Y. 
(B.  H.  Howell  Son  & Co.) 

5.  New  York  Sugar  Refining  Co., 

Long  Island  City. 
(B.  H.  Howell  Son  & Co.) 

6.  Mollenhauer  Sugar  Refinery, 

( Not  in  operation  for  5 years, 
except  as  warehouse.  B. 
H.  Howell  Son  & Co.  j 

NEW  YORK. 

1.  Arbuckle  Brothers, 

Brooklyn,  N.  Y. 

2.  Federal  Sugar  Refining  Co., 

Yonkers,  N.  Y. 
(Smith  & Schipper.) 

3.  Warner  Sugar  Refining  Co., 

Edgewater,  N.  J. 

PHILADELPHIA. 

7.  Spreckles  Sugar  Refining  Co., 

8.  Franklin  Sugar  Refining  Co., 

(Has  not  refined  sugar  for 
10  years. ) 

9.  Pennsylvania  Sugar  Refining  Co. 

(Refinery  completed  but  never 
operated.  Controlled  through 
loans. ) 

PHILADELPHIA. 

4.  W.  J.  McCahan  Sugar  Refining 
Co. 

BOSTON. 

10.  American  Sugar  Refining  Co. 

BOSTON. 

5.  Revere  Sugar  Refining  Co. 

NEW  ORLEANS. 

11.  American  Sugar  Refining  Co., 

12.  American  Sugar  Refining  Co., 

(New  refinery  nearly  com- 
pleted at  St.  Bernard  Parish, 
New  Orleans  ; is  understood 
to  be  of  largest  refining 
capacity  of  its  kind  in  the 
World.) 

NEW  ORLEANS. 

6.  Henderson  Sugar  Refining  Co. 

32 


EXHIBIT  E: 

PORT  DIFFPRENTIALS--DIFFERENTIAL 
INLAND  FREiaHT  RATES. 

An  Advisory  Commission  in  1882,  at  the  instance  of  the 
Trunk  Line  Railroads,  as  then  constituted,  and  of  the  principal 
Commercial  Organizations  located  at  North  Atlantic  Ports,  passed 
upon  the  subject  of  differential  inland  rates  of  freight  to  or  from 
the  respective  ports. 

Subsequently  The  Interstate  Commerce  Commission,  upon 
no  less  than  three  different  occasions,  has,  at  the  request  of 
numerous  interested  parties,  acted  in  the  capacity  of  arbitrator 
to  review  and  pass  upon  phases  of  the  differential  situation  as 
developed,  and  among  other  features  to  decide  whether  conditions 
that  prevailed  as  long  ago  as  in  1862  were  still  pertinent  and 
justified  the  current  differential  rates  of  inland  freight  as  between 
the  respective  Ports. 

The  sworn  testimony  of  officials  of  Trunk  Line  Railroads, 
and  of  prominent  Commercial  interests,  recently  submitted  to  The 
Interstate  Commerce  Commission,  has  demonstrated  that  their 
several  decisions  have  been  ignored,  and  that  for  a long  period 
differentials  have  not  in  actual  practice  been  accorded  the  Ports 
of  Philadelphia  and  Baltimore. 

Might  it  not  be  an  act  of  discretion  and  wisdom  on  the  part 
of  The  Commission,  in  its  advisory  capacity,  to  now  intimate  that 
the  time  has  arrived  when  in  its  judgment  the  disturbing  factor 
of  differentials  might  be  eliminated  without  injustice  to  any 
of  the  various  interests  involved?  It  certainly  is  a subject  for 
very  serious  consideration  whether  the  further  continuance  of 
nominal  or  ‘‘sentimental  ” factors  has  other  than  a demoralizing 
influence. 

Unquestionably  the  nominal  differentials  conceded  to  Phila- 
delphia and  Baltimore  have  been  used  at  New  York  as  a pretext 
for  rebating,  and  also  for  the  assumption  of  accessorial  charges 
by  Trunk  Line  Railroads.  Would  not  the  general  inland  freight 
situation  be  cleared,  and  conditions  materially  simplified,  if  this 
disturbing,  intangible,  factor  of  differentials  was  eliminated? 


33 


It  has  certainly  been  the  means  of  complicating  innumerable 
situations  when  interjected  into  local  freight  conditions. 

In  Philadelphia  it  would  seem  that  the  trinity,  represented 
by  shortest  inland  distance,  by  moderate  grades,  and  by  proximity 
to  fuel  along  the  line  of  transportation,  form  an  aggregation 
which,  if  intelligently  and  vigorously  availed  of  in  its  relations 
to  this  community,  should  assure  to  it  an  equitable,  ratable  share 
of  the  export  and  import  commerce  that  naturally  seeks  the  most 
economic  and  expeditious  point  on  the  Atlantic  Seaboard  for 
interchange  between  inland  and  ocean  carriers. 

For  over  thirty  years  New  York  Trunk  Line  Railroads  at 
New  York  have  uninterruptedly  manipulated  charges,  expenses, 
services,  and  allowances  upon  GRAIN  on  substantially  similar 
lines  to  those  recently  testified  to  under  oath,  in  connection  with 
cartage  and  lighterage  (accessorial  allowances),  on  sugar  at  New 
York. 

More  intelligent,  legitimate,  scientific  mixing  of  Grain  is 
done  in  New  York  Harbor  in  a single  month,  than  is  done  in  a 
whole  year  in  the  balance  of  the  North  Atlantic  Ports.  Let  the 
mixing  of  grain  at  New  York  go  ahead  untrammeled  as  hereto- 
fore; let  them  mix  to  their  heart’s  content ; BUT,  let  The  Inter- 
state Commerce  Commission  forthwith  stop  the  Trunk  Line 
Railroads  from  mixing  the  terminal  charges  and  allowances  for 
handling  grain  at  New  York,  with  the  nominal  inland  rates  of 
freight. 


